Netflix, Amazon drive up price for Hollywood content, conferees told

Neither Netflix nor Amazon were on stage, but the growing clout of these online video distributors was nonetheless felt at a San Francisco conference focused on the future of TV.

As the rival services bid against one another for exclusive rights to popular movies and TV shows, in a manner that recalls the rivalry between premium cable networks HBO and Showtime, the fallout has been unmistakable, said Shawn Strickland, chief executive of Redbox Instant by Verizon.

“It’s gotten more expensive,” Strickland said in remarks at the Broadcasting & Cable’s NextTV Summit. “It’s gotten more competitive, with Amazon and Netflix pursuing exclusive rights.”

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Bidding wars are probably music to the ears of Hollywood executives, seeking to obtain top dollar for digital rights to popular TV shows such as Nickelodeon’s “SpongeBob SquarePants” or a billion-dollar blockbuster such as Marvel Entertainment’s “Iron Man 3.” But it also raises the barrier for those seeking to enter the rapidly growing Internet video market.

“It’s changed the playing field,” said Strickland.

The 6-month-old service is seeking to carve out a space among consumers who are just discovering Internet video services. Although Redbox Instant has been available on Microsoft’s Xbox 360 game console, Samsung’s Internet-connected smart TVs and on the web, as well as through Blu-ray disc players, a deal reached last month with Roku has been a boon to the service.

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“It fits that consumer who is beginning to transition to streaming -- which is right where our product plays,” Strickland said.

Subscribers who pay $8 a month get unlimited access to its online movie and TV library, though non-members can use the service to rent or buy movies on-demand or reserve a DVD to be picked up later at one of Redbox’s distinctive kiosks.

Although the event followed one of the most hotly anticipated events in Silicon Valley, Apple Inc.'s unveiling Tuesday of the latest update of its popular iPhone smartphone, the technology announcement that fueled the greatest enthusiasm among these digital media executives was one made two months earlier -- Google Inc.'s Chromecast, the 2-inch-long, $35 gadget that enables users to connect Apple and Android devices to the biggest screen in their home without ever touching the remote control.

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Brightcove Chief Technical Officer Albert Lai said Chromecast is an inexpensive, easy-to-use alternative for consumers looking to watch Internet video on their living room TV -- without investing in a new, connected TV.

“Do you buy another receiver? Pay more money?” said Lai. “Google comes out, you have a dongle that costs $35. Now you can buy three of them” to plug into every TV in the home.


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